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Monday, March 22, 2010

How a Herb Created a Billionaire - The Story of KC Abraham and Musli Power X-Tra

That nothing sells like sex drugs needn’t be repeated. The enormous success of Viagra and its later day cousins Levitra & Cialis stands as ample testimonies. But Kunnath C Abraham, a young farmer based in Muvattupuzha, a satellite town of Kochi, had a little more foresight. He figured that allopathic drugs like Viagra would soon run into a wall, as far as sales is concerned, due to their associated health risks. And that is what happened to Viagra and its cousins during the next couple of years, especially in countries like India. This was the same time during which Abraham was interested in a herb called safed musli, and a huge surplus yield in Kerala with no takers. Since the herb had an emerging reputation for curing male impotence, KC Abraham decided to take his big chance in pharma business. He and his small team created Musli Power Extra, a concoction of nine Ayurvedic drugs including safed musli. And followed it up with one of the loudest ad campaigns that the ayurvedic OTC segment has seen in recent years. The lure of a safe sex drug clicked. Just within a few years, Kunnath Pharmaceuticals was selling more than 2 crore capsules a month. Priced at par or more with Viagra clones, each of these capsules bring in Rs. 25 in revenue to Kunnath. But unlike Viagra clones that can be bought even one-piece, Musli Power Extra’s smallest pack is of 30s, costing a neat Rs.750. But then, Kunnath doesn’t promise instant on-demand cure. Though notable improvement is possible within 3-4 days, one minimum course is 90 capsules, over 45 days, available on discount at Rs. 2000 when brought as a pack of 90s. No wonder, KC Abraham became an overnight billionaire, at least in rupee terms. But it was not without tough fights. The entrepreneur in him has always rose to the occasion with nifty strategies like using the name musli instead of safed musli which is not in the country’s official Ayurvedic pharmacoepia, and settling out-of-court with Viagra owner Pfizer over using their trade name. Abraham has also won in the last round where it was tested whether his campaign of selling a cure with advertisements is permissible under Indian Law, by quickly dropping the impotence-cure tag and adopting a vitality-booster tag. Kunnath was also raided and a case registered against it in recent past. But KC Abraham will show you the thankful testimonies that he receives every day from his customers. He is gearing up to fight the latest round against the wonder drug by People’s Union for Civil Liberties (PUCL) which has filed a writ petition in Kerala High Court on 8th February 2010 against marketing Musli Power Extra. KC Abraham wants Kunnath to be the big-pharma of Ayurveda, much like Pfizer, GSK, or Merck. His business ambition is self-admittedly bigger than Dhirubhai S Ambani, and if it were possible he would have worked for a Nobel. And much like Bill Gates, he would love to spend much of his fortune on charity, a direction in which he has already started.

Seasonal Magazine in conversation with KC Abraham, founder of Musli Power Extra.

Your story is often said as an overnight success story. One day a farmer, a few days later a billionaire. Is this true?

If overnight means a few years of hard work and hundreds of impossible hurdles, yes, I am an overnight success story. It is media who calls me a billionaire and such things. I don’t work for such tags, but yes, Kunnath has been a tremendous commercial success.

Musli Power Extra has been a rapid success in the OTC segment. To what do you attribute this success?

Firstly, we could create the right formulation that worked. The fact that Safed Musli was beneficial for sexual debility was well-known, but we could arrive at the right formula for mixing Musli and other proven herbs. This was largely done by me through months of experiments.

But copying even the right formula is not tough these days. Why then is competition unable to catch up with you?

They are trying but it is not easy. There are no shortcuts. Because, it is not only a matter of the right formula of the herbs, but how the extracts are handled. We go for high-quality, high-concentration extracts of active ingredients in these herbs, while others mostly go for bulk raw herbs. It raises our costs as we have to use more raw materials, but we want our medicines to be 100% effective.

Even this technology can be copied over time, isn’t it?

Not really, as this requires one’s own R&D setup. No one wants to do that kind of investment. You will be surprised to know that our analytical lab has been set up with an investment of around Rs. 2 crore. We did this even before we could afford such things. And even before that, we were relying on strong setups like the lab in Amala Medical College and other similar clinical labs.

The history of heavily marketed OTC ayurvedic drugs is that, authorities and the medical intelligentsia continue to be sceptical of their real effectiveness. How do you plan to survive this hurdle?

Yes, I understand the situation, but we have already surmounted this hurdle to a great extent. But, yes, not everybody is going to agree. The question is whether the patients who have taken this medicine agree. And in that aspect we are tremendously satisfied.

You mean you get testimonials etc?

A lot of them, and regularly too, reassuring us that we have created something really effective and helpful.

Your flagship brand, Musli Power Extra, has been targeted many times by the central as well as state drug regulators. What were they looking for, and what is the current situation?

The fact that they are suspicious of our brand is our greatest testimony. Our medicine is so effective, that too in the short-term, that they fear we are relying on synthetic hormones. But multiple tests carried out in premium labs in Delhi, Hyderabad, Thiruvanathapuram, and a few other cities too have cleared us.

But isn’t this a constant hassle? One positive finding and your brand can disappear…

No, we don’t consider it as a hassle or risk. How can they find something that is not there? We are 100% sure that we never add any synthetic hormones or additives to our medicines. So, why should we fear? We have a highly capable lab of our own, and we regularly test each batch of our medicines.

From the initial positioning as a drug for male impotency, you have successively repositioned it as something for sexual debility in women too, then as a cure for male and female infertility, and now as a health tonic for general vitality. Isn’t this only a marketing strategy to attract a wider audience?

No not at all. You see, all these just happened in the course. In the beginning we were only hopeful on this as a cure for sexual debility. But then the patients started coming to us, thanking us for helping them have a child. Then we started researching on this facet and that is how all these happened. It was not planned as such.

But aren’t all these, too many diverse applications for a single medicine?

No, not really, if you know how ayurveda works. Sexual health, fertility, and general health are inseparable aspects in ayurveda. We believe that is why this formulation is effective for all these conditions.

If that is the case, why didn’t anybody – especially trained ayurvedic physicians – did not stumble on such a cure?

I would say we were fortunate and hardworking. Yes, what you told is true, even some of the ayurvedic doctors we have employed are surprised at the effectiveness of our remedies. Patients continue to give them positive feedback on infertility.

You have even resorted to strategies like a money-back guarantee on infertility. How genuine are such strategies?

We are genuine on that promise, but we have almost never been asked for a refund, because our patients more or less convey that they are happy with our medicine and would like to give it more time.

Kunnath has resorted to one of the heaviest advertising campaigns in the OTC segment. How do you value the role advertisements have played?

Advertisements do play a critical role, but at the end of the day, advertisements are only advertisements. Something that we would like to say. What matters more is word-of-mouth publicity among patients. In these private problems like impotency and infertility patient-to-patient advice plays the most critical role. Good news about an effective cure really goes places.

You have been alleged to find loopholes and turnarounds to dodge regulations in creating such medicines and marketing them. How will you counter?

Well, look at it from another angle. I have this medicine that I find to be really powerful and safe. Should I keep it to myself just because our laws are archaic and their interpretation or implementation is corrupt? No, I shouldn’t, and that is what we did. Yes, we were creative and persistent to jump past the obstacles. In the final observation, the only relevant question is whether it was good for our patients. It was.

You even had a tiff with Pfizer over using the Viagra trademark…

That is done and over with. Again, it was a case of correctly and powerfully communicating with our patients. But when they objected, we understood and pulled back.

PUCL has filed a writ against you recently in Kerala HC about the legality of marketing cures like Musli Power Extra…

We are aware of that, and our legal team will defend us properly. We had even bigger cases thrown against us. We are confident of surviving.

What are your objectives in starting Kunnath Pharmaceuticals, apart from commercial success?

Yes, we are past that stage – aiming only for commercial success. My real aim is to be the brand that redefines what modern Ayurveda is before a sceptical world community. They are sceptical because many of our conventional ayurvedic drugs don’t pass stringent Western tests like those for heavy metals. I want to change that. We will make our ayurvedic drugs synonymous with the safest drugs in the world. We are investing heavily for this – pursuing drug approvals in over 70 countries, and developing a pipeline of over 60 ayurvedic formulations. We have even initiated the process of getting FDA approval.

Apart from Musli Power Extra and Breathe Power Extra, what are your upcoming formulations?

Well, our testing pipeline is now led by a formulation for diabetes, and many others are set to follow. We get calls from the non-organized traditional ayurvedic physicians (vaidyas) of Kerala who want us to market their best remedies which are generally closely guarded secrets in their families. They want their formulations to live on even after them, and as an organization that can make success out of the correct formulation, they approach us. We are currently testing some new-age medicines based on these formulations.

Apart from formulations, what are the near-term objectives for the organization?

We want to start a chain of neighbourhood clinics all over Kerala, and possibly across the nation later. Qualified and Kunnath accredited ayurvedic physicians will provide consultations to patients. We want to reach out to the patients, not wait for them to discover our remedies at a too later stage.

Personally, what are your desires and ambitions?

All through my life I have set impossible targets and achieved them. So sky should be the limit. Last year the Nobel for Medicine went for scientists who created breakthroughs in geriatric medicine. And here I am, with a formulation that delivers youthful vigour to even old age couples. So, if I were a scientist, I should have desired for the Nobel. (Laughs). Anyway, that is the kind of targets or desires I nurse. As the saying goes, you have to shoot for the stars to get the moon.

And your personal and business ambitions?

If you really press me, I would say I will try to surpass Dhirubhai Ambani. The scope for Ayurveda is that much, even ahead of refining. I am predicting that the world will turn back from harmful allopathic medicines in an unprecedented way. This has started already. In the coming years and decades this change to Ayurveda will gather unbelievable momentum. We will be ready for that age with the widest portfolio of authentic but modern ayurvedic medicines for all common diseases. Kunnath will be the big pharma of Ayurveda, much like you today speak about Merck, GSK or Pfizer. But personally I don’t plan to repeat Dhirubhai’s follies. (Smiles). I won’t leave back a fortune only for my family. They will be given a decent fortune of course, but nothing to quarrel over through an entire lifetime. My personal ambition is a mega charity initiative, which we have already started in a significant way. As our profits rise, we plan to contribute more and more to our charitable initiatives, which are now geared to serve economically challenged students and senior citizens.